Mata et al v. Manpower Inc. / California Peninsula et al, No. 5:2014cv03787 - Document 186 (N.D. Cal. 2016)

Court Description: Order Denying Motion for Preliminary Approval of Class Action Settlement. Signed by Judge Lucy H. Koh on 12/22/16. (lhklc2S, COURT STAFF) (Filed on 12/22/2016)
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION United States District Court Northern District of California 11 12 JUVENTINA MATA, et al., Plaintiffs, 13 14 15 16 17 18 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT v. MANPOWER INC. / CALIFORNIA PENINSULA, et al., Re: Dkt. No. 175 Defendants. Plaintiffs Lesli Guido and Claudia Padilla (“Plaintiffs”) bring this action against 19 Defendants Manpower Inc.; Manpower, Inc./California Peninsula; and ManpowerGroup US Inc. 20 (collectively, “Defendants”). Before the Court is Plaintiffs’ supplemental motion for preliminary 21 approval of class action settlement. ECF No. 184 (“Supp. Mot.”). The Court held a hearing on 22 this motion on December 22, 2016. Having considered Plaintiffs’ motion, the arguments of 23 counsel at the December 22, 2016 hearing, the relevant law, and the record in this case, the Court 24 DENIES Plaintiffs’ motion for preliminary approval. The parties are ORDERED to file an 25 amended motion for preliminary approval, as well as an amended Settlement Agreement and 26 proposed Notice, by January 17, 2017. 27 28 1 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 I. BACKGROUND A. Factual Background 2 3 4 Defendant Manpower Inc. (“Manpower Inc.”), is a Wisconsin corporation that “conduct[s] business throughout the State of California.” ECF No. 81 ¶ 8. Manpower Inc. “own[s], operate[s] and control[s] a business for the purpose of operating an employment agency” for temporary 5 service workers. Id. ¶ 18–19. Manpower Inc. employed temporary service workers in California 6 from 2009 to 2013. ECF No. 133 at 25. In January 2013, Manpower Inc. changed its name to 7 ManpowerGroup Inc. (“ManpowerGroup”). ECF No. 137 at 4; ECF No. 133 at 12. In addition, 8 after this name change, ManpowerGroup ceased employing temporary service workers in 9 California. Any temporary service workers previously employed by Manpower Inc. were 10 United States District Court Northern District of California 11 transferred to one of Manpower Inc.’s subsidiaries. Defendant Manpower, Inc./California Peninsula (“Manpower CP”) is a California 12 corporation that began operations in 1968. ECF No. 48-2 at 1. In 2008, Manpower Inc. purchased 13 Manpower CP, ECF No. 81 ¶ 15, and Manpower CP became a subsidiary of Manpower Inc., ECF 14 No. 133 at 25. Manpower CP continues to employ temporary service workers in California. 15 Defendant ManpowerGroup US Inc. (“ManpowerGroup US”), is a Wisconsin corporation. 16 ECF No. 81 ¶ 9. ManpowerGroup US provides back-office services and upper-level operational 17 oversight for Manpower CP. ManpowerGroup US does not employ temporary service workers in 18 California, and it is unclear whether ManpowerGroup US has a parent-subsidiary relationship with 19 any of the other Defendants. 20 21 Plaintiff Claudia Padilla (“Padilla”) was employed by Manpower CP from December 2011 to March 2014. ECF No. 81 ¶ 38. Plaintiff Lesli Guido (“Guido”) was employed by Manpower 22 CP from March 2011 to October 2011. Id. ¶ 48. A third Plaintiff, Juventina Mata, was dismissed 23 24 from the instant action after the parties discovered that “there [was] no record of Ms. Mata ever having worked for any of the Defendants.” ECF No. 38 at 5. 25 As part of their employment, Plaintiffs allege that Defendants required Plaintiffs to attend 26 an orientation as well as trainings related to Defendants’ timekeeping and other internal processes. 27 28 2 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 ECF No. 81 ¶ 23. Plaintiffs further aver that they were required to attend client-specific 2 orientations and meetings, which included post-termination meetings. Id. Plaintiffs assert that 3 Defendants did not pay Plaintiffs for engaging in these activities, did not reimburse Plaintiffs for 4 expenses incurred related to these activities, and did not provide accurate wage statements to 5 reflect Plaintiffs’ participation in these activities. Id. 6 7 B. Procedural History This is not the first time that persons in California have brought a putative wage and hour 8 class action lawsuit against a Manpower entity. In fact, the Court is aware of at least nine such 9 cases. The Court briefly reviews these nine cases below. 1. Willner v. Manpower Inc., No. 11-CV-2846-JST (N.D. Cal.) (“Willner I”) 11 United States District Court Northern District of California 10 On March 17, 2011, Vera Willner (“Willner”), an employee of Manpower Inc., “br[ought] 12 [a] . . . putative class action against Manpower [Inc.] for California Labor Code violations 13 stemming from Manpower [Inc.]’s failure to furnish accurate wage statements and failure to 14 timely pay all wages to employees who received their wages by U.S. mail.” Willner v. Manpower 15 Inc., No. 11-CV-2846-JST (“Willner I”), ECF No. 196 (“Willner Prelim. Approval”) at 1 (internal 16 quotation marks and alteration omitted). The case was assigned to U.S. District Judge Jon Tigar. 17 Although Willner eventually amended her complaint five times, Manpower Inc. was the 18 only named defendant in all six of her complaints. Willner was not employed by Manpower CP, 19 and Willner did not name either Manpower CP or ManpowerGroup US as defendants in Willner I. 20 In the operative complaint, Willner asserted the following five causes of action: “(1) 21 violations of California Labor Code section 201.3(b)(1) for failure to pay timely weekly wages; 22 (2) violations of California Labor Code section 226 for failure to furnish accurate wage 23 statements; (3) violations of California’s Unfair Competition Law (‘UCL’) for failure to provide 24 accurate wage statements and to pay timely wages; (4) penalties under the Private Attorney 25 General Act (‘PAGA’) for failure to provide accurate wage statements and to pay timely wages; 26 and (5) violations of California Labor Code sections 201 and 203 for failure to pay timely wages 27 due at separation.” Id. at 1–2. 28 3 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 On August 1, 2014, the Willner I parties moved for preliminary approval of a class action 2 settlement. Willner I, ECF No. 150. Plaintiffs in the instant case—Guido and Padilla—objected 3 to this preliminary approval motion. Willner I, ECF No. 154. Manpower Inc. responded to Guido 4 and Padilla’s objections by arguing that Guido and Padilla “lack[ed] standing to object” because 5 they had been employed by Manpower CP, not Manpower Inc. Willner I, ECF No. 162 at 1–2. 6 Furthermore, Manpower Inc. contended that Willner’s request for damages was “predicated upon 7 the late mailing of paychecks,” whereas the underlying claim in Mata involves a “failure to pay 8 any wages whatsoever for certain hours worked.” Id. at 4 (emphasis removed). Accordingly, 9 Manpower Inc. argued that “the claims in Mata are unrelated to the claims in” Willner I. Id. In light of Guido and Padilla’s objections, Judge Tigar ordered “the Willner [I] parties to 11 United States District Court Northern District of California 10 clarify the release language [in the Willner I settlement] so as to ensure that the Willner [I] class 12 d[oes] not overlap with the Mata class.” Padilla v. Willner, 2016 WL 860948, *2 (N.D. Cal. Mar. 13 7, 2016). The Willner I parties complied with Judge Tigar’s request, and filed an amended motion 14 for preliminary approval. Once again, Guido and Padilla filed objections. 15 On January 2, 2015, Judge Tigar overruled Guido and Padilla’s objections and granted the 16 renewed motion for preliminary approval. Judge Tigar found “that the amended settlement 17 agreement ha[d] corrected the . . . deficiencies [previously] identified,” as “the parties have revised 18 the language of the release to clarify that it applies only to claims that ‘arise out of the allegations 19 in the [Willner I] lawsuit.’” Willner Prelim. Approval at 4–5. Judge Tigar’s Preliminary Approval 20 Order defined the settlement class as follows: 21 24 All persons who were or are employed by Manpower Inc. in California as temporary employees at any time from March 17, 2010 through January 20, 2012 and who received their wage statements (i.e. paystub) by U.S. mail, payment card or electronic submission, except individuals who were or are at the same time jointly employed by a franchisee of Manpower Inc., including but not limited to, franchisee CLMP LTD., dba Manpower of Temecula. 25 Id. at 6. Judge Tigar granted final approval of the class action settlement in Willner I on June 22, 26 2015. Willner I, ECF No. 208. 22 23 27 28 2. Padilla v. Willner, 15-CV-4866-JST (N.D. Cal.) (“Willner II”) 4 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 On October 22, 2015, Guido and Padilla filed suit against Willner and Manpower Inc. 2 Padilla v. Willner (“Willner II”), 15-CV-4866-JST. Pursuant to Federal Rule of Civil Procedure 3 60(b), which allows parties to seek relief “from a final judgment,” Guido and Padilla sought, in 4 Willner II, to set aside the Final Approval Order in Willner I. Fed. R. Civ. P. 60(b). 5 Willner II was originally assigned to U.S. District Judge Thelton Henderson, but was 6 reassigned to Judge Tigar after Judge Tigar found Willner II to be related to Willner I. Willner II, 7 ECF No. 20. In December 2015, the Willner II defendants filed separate motions to dismiss. 8 Willner II, ECF No. 24 & 26. On March 7, 2016, Judge Tigar granted these motions to dismiss 9 with prejudice. Padilla v. Willner, 2016 WL 860948 (N.D. Cal. Mar. 7, 2016). 10 In reaching this decision, Judge Tigar observed that, “under well-established principles of United States District Court Northern District of California 11 comity, it would be very much improper to grant Plaintiffs the relief they request.” Id. at *5. 12 Indeed, “Plaintiffs . . . appear to be seeking relief in this Court in order to avoid those rulings in 13 the Mata case they don’t like. Under these circumstances, abstention is appropriate.” Id. In 14 addition, Judge Tigar found that “Plaintiffs lack[ed] standing to request [that] the Willner [I] 15 settlement be vacated because they were never members of the Willner [I] class and were therefore 16 unaffected by the order approving the Willner [I] settlement.” Id. at *6; see also id. at *7 17 (“[Plaintiffs’] alleged injury fails to meet any of the elements of standing.”) (emphasis added). 18 19 On April 4, 2016, Plaintiffs’ counsel in the instant case filed a notice of appeal to the Ninth Circuit of Judge Tigar’s March 7, 2016 decision in Willner II. The appeal remains pending. 20 3. Ramirez v. Manpower Inc., No. 13-CV-2880-BLF (N.D. Cal.) (“Ramirez I”) 21 On February 13, 2013, Patricia Ramirez (“Ramirez”), who was employed by Manpower 22 CP from January 1 to January 25, 2013, filed suit against Manpower Inc. Ramirez v. Manpower 23 Inc. (“Ramirez I”), No. 13-CV-2880-BLF. Ramirez was represented by the same counsel as 24 Plaintiffs’ counsel in the instant case. On May 3, 2013, Ramirez added ManpowerGroup Public 25 Sector Inc. and ManpowerGroup US as defendants in Ramirez I. Ramirez I, ECF No. 1 at 2. The 26 case was initially assigned to U.S. District Judge Edward Davila, and was later reassigned to U.S. 27 District Judge Beth Freeman. Ramirez I, ECF No. 59. 28 5 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 The allegations in Ramirez I are substantially similar to the allegations in the instant case. 2 The original complaint in Ramirez I, for instance, alleges that “Defendants maintained a policy 3 and practice throughout the Class Period of requiring employees to attend unpaid training sessions 4 for employees and whose employment had been terminated by Defendants at Defendants’ 5 customer(s) request, to attend a termination meeting at Defendants’ local office, or other place 6 designated by Defendants, without paying those employees for the time they spent attending such 7 meetings.” Ramirez I, ECF No. 1 (“Ramirez I Compl.”) ¶ 19. The Class Period in Ramirez I was 8 “defined as the period of time beginning four years before the commencement of this action 9 through the date on which each class or subclass herein is confirmed.” Id. ¶ 2. Because Ramirez I 10 United States District Court Northern District of California 11 was filed on February 13, 2013, the Ramirez I Class Period began on February 13, 2009. Ramirez asserted the following causes of action in the original complaint: (1) failure to pay 12 reporting time pay, in violation of California Labor Code § 218; (2) knowing and intentional 13 failure to comply with itemized employee wage statement provisions, in violation of California 14 Labor Code §§ 226(a), 1174, and 1175; (3) failure to pay wages timely, in violation of California 15 Labor Code § 204; (4) violation of California Labor Code § 216; (5) failure to pay all wages upon 16 termination, in violation of California Labor Code §§ 201, 202, and 203; and (6) violation of the 17 UCL. Id. at ¶¶ 41–79. 18 On January 13, 2014, the Ramirez I court granted a motion to join Manpower CP as a 19 defendant in Ramirez I. Ramirez I, ECF No. 31 at 6–7. On January 31, 2014, Ramirez filed an 20 amended complaint. Ramirez I, ECF No. 32. This complaint asserted the same causes of action as 21 the original complaint, along with additional causes of action for: (1) compensation for unpaid 22 wages, pursuant to California Labor Code §§ 1194 and 1198 and IWC Wage Order No. 4-2001, 23 and (2) enforcement of the California Labor Code under PAGA. Id. ¶¶ 60–62, 94–96. The 24 amended complaint defined the Class Period as: “the period of time beginning four years before 25 the commencement of this action (February 13, 2013 as to Manpower, Inc.; ManpowerGroup 26 Public Sector, Inc.; and ManpowerGroup US Inc.; and April 12, 2013 as to Manpower, Inc./ 27 California Peninsula) through the date on which [the class] is confirmed.” Id. ¶ 2. 28 6 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 On May 22, 2014, the Ramirez I defendants moved for summary judgment. On July 10, 2 2014, Judge Freeman granted summary judgment in favor of the Ramirez I defendants. Ramirez I, 3 ECF No. 111. During the pendency of Ramirez I, Ramirez had filed a petition for Chapter 7 4 bankruptcy in the United States Bankruptcy Court for the Northern District of California. Id. at 3. 5 Ramirez, however, “did not disclose” her involvement in Ramirez I “in her Schedule of Assets.” 6 Id. As Judge Freeman explained, “[i]n the bankruptcy context, the federal courts have developed a 7 basic default rule: If a plaintiff-debtor omits a pending (or soon-to-be-filed) lawsuit from the 8 bankruptcy schedules and obtains a discharge (or plan confirmation), judicial estoppel bars the 9 action.” Id. at 6. 4. Ramirez v. Manpower CP, No. 13-CV-3238-EJD (N.D. Cal.) (“Ramirez II”) 11 United States District Court Northern District of California 10 On April 12, 2013, Ramirez filed a second putative class action lawsuit, this time against 12 Manpower CP. Ramirez v. Manpower, Inc./California Peninsula (“Ramirez II”), No. 13-CV- 13 3238-EJD. As in Ramirez I, Ramirez was represented by the same counsel as Plaintiffs’ counsel 14 in the instant case. Ramirez II was assigned to U.S. District Judge Edward Davila. 15 The Ramirez II complaint contained the same causes of action as Ramirez I, based on the 16 same allegations. See, e.g., Ramirez II, ECF No. 25 at 1 (Ramirez II court observing that Ramirez 17 I and Ramirez II “allege[] substantially similar, if not identical, [California] Labor Code 18 violations.”). The only apparent difference was the defendants named in the respective actions: 19 Manpower Inc.; ManpowerGroup Public Sector, Inc.; and ManpowerGroup US were defendants 20 in Ramirez I, and Manpower CP was the defendant in Ramirez II. After Manpower CP became a 21 defendant in Ramirez I, Judge Davila issued an Order to Show Cause “why [Ramirez II] should 22 not be dismissed as [being] duplicative of [Ramirez I].” Id. at 2. In response to this Order, the 23 Ramirez II parties filed a stipulation of dismissal on January 21, 2014. Ramirez II, ECF No. 26. 24 5. Stimpson v. Manpower US Inc., No. 15-CV-0829-GPC (S.D. Cal.) (“Stimpson”) 25 On March 12, 2015, Tiffany Stimpson (“Stimpson”) filed a putative class action lawsuit 26 against Manpower US Inc. in San Diego County Superior Court. Stimpson v. Manpower US Inc., 27 No. 15-CV-0829-GPC (“Stimpson”), ECF No. 1-4. The case was removed to the Southern 28 7 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 District of California on April 15, 2015, and assigned to U.S. District Judge Gonzalo Curiel. ECF 2 No. 1. 3 On December 28, 2015, Stimpson filed an amended complaint, which named as defendants 4 Manpower US Inc. and CPM LTD. (d/b/a Manpower, Manpower of San Diego, and Manpower 5 Temporary Services). Stimpson, ECF No. 15. This amended complaint asserted the following 6 causes of action: (1) failure to pay minimum wages, in violation of California Labor Code §§ 7 1194(a) and 1198; (2) failure to pay reporting time pay, in violation of California Labor Code § 8 218; (3) improper wage statements, in violation of California Labor Code § 226(a); (4) wages not 9 paid upon termination, in violation of California Labor Code §§ 201–203; (5) unlawful paying of a lower wage, in violation of California Labor Code §§ 222 and 223; and (6) unfair competition, in 11 United States District Court Northern District of California 10 violation of California Business and Professions Code § 17200. Plaintiff in Stimpson alleges that 12 “Manpower had a uniform policy of not compensating Class Members for orientation time or the 13 time they spent participating in interviews on Manpower’s behalf.” Id. ¶ 28. The claims in 14 Stimpson and Mata are so similar that the amended complaint in Stimpson seeks equitable tolling 15 on the basis of Mata. Id. ¶ 42. On August 5, 2016, the parties in Stimpson stipulated to dismiss 16 Manpower US Inc. without prejudice. Stimpson, ECF No. 34. 17 18 19 20 21 22 23 24 25 26 27 28 5. Various State Court Cases (Monterey and Santa Cruz County Superior Courts) (“Sanchez”, “Rico,” “Zemudio,” and “Martinez”) Finally, there are at least three cases proceeding in California state court involving claims similar to those at issue in the instant case. On October 13, 2015, Keurig Green Mountain, Inc. (“Keurig”) filed a notice in the docket of the instant case. ECF No. 75. In this notice, Keurig stated that it was being sued in Monterey County Superior Court by Plaintiffs’ counsel in Mata. Id. at 3; see Sanchez v. Keurig Green Mountain, Inc., No. M132626 (“Sanchez”). According to Keurig, Plaintiffs’ counsel had asserted the same causes of action as Plaintiffs’ counsel had asserted in Mata, and the crux of the Sanchez action was that Keurig worked with Manpower CP to deny wages to employees. Another state court case, Rico v. Manpower, Inc./California Peninsula, No. M135340 8 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 (“Rico”), involves “donning and doffing” claims asserted against various Manpower entities. ECF 2 No. 176 at 34. The case is being heard in Monterey County Superior Court. Rico arose because 3 of an earlier case, Zemudio v. Dole Food Co., No. M.121212 (“Zemudio”), which involved meal 4 period, rest period, and donning and doffing claims at Dole’s Camphora Road facility in Soledad, 5 California. The members of the putative Zemudio class who were employees of Manpower 6 instituted Rico as a second lawsuit because they believed that the time-keeping system used by 7 Manpower employees resulted in a greater loss of wages than those of the remaining class 8 members in Zemudio. 9 Finally, Martinez v. Harmony Foods Corporation, No. CV177053 (“Martinez”), involves meal and rest period claims asserted against entities that may have employed Manpower 11 United States District Court Northern District of California 10 associates. The case is being heard in Santa Cruz County Superior Court. 12 6. The Instant Action 13 Plaintiffs filed the original complaint in the instant case on May 29, 2014. ECF No. 1-1 14 (“Compl.”). This complaint named Manpower CP, Manpower US Inc., Manpower Inc., 15 ManpowerGroup Public Sector Inc., and ManpowerGroup US as Defendants, Compl. ¶¶ 6–10, and 16 asserted the following causes of action: (1) failure to pay reporting time pay, in violation of 17 California Labor Code § 218; (2) failure and refusal to pay agreed wages, in violation of 18 California Labor Code §§ 201, 202, 204, 216, 218, 221, 223, 1194, and 1198, Wage Order No. 4- 19 2001, and 8 CCR § 11040(11); (3) knowing and intentional failure to comply with itemized 20 employee wage statement provisions, in violation of California Labor Code §§ 226(a), 1174, and 21 1175 and Wage Order No. 4-2001; (4) failure to pay wages timely, in violation of California Labor 22 Code § 204; (5) failure to pay all wages upon termination, in violation of California Labor Code 23 §§ 201, 202, and 203; and (6) violation of the UCL. Id. ¶¶ 46–94. Plaintiffs sought to represent a 24 class comprised of “[a]ll current and former employees of Defendants who worked in California . . 25 . during [a specific] Class Period.” Id. ¶ 36. 26 27 28 On July 21, 2014, Plaintiffs filed the First Amended Complaint (“FAC”). ECF No. 1-2 (“FAC”). The FAC continued to name Manpower CP, Manpower US Inc., Manpower Inc., 9 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 ManpowerGroup Public Sector Inc., and ManpowerGroup US Inc. as Defendants. In addition to 2 the causes of action alleged in the original complaint, the FAC added the following causes of 3 action: (1) violation of California Labor Code § 216; (2) failure to pay minimum wages, in 4 violation of California Labor Code §§ 1197 and 1199 and the Wage Order; and (3) enforcement of 5 the California Labor Code under PAGA. FAC ¶¶ 100–15, 142–50. Finally, the FAC defined the 6 Class Period as “the period of time beginning February 13, 2009, through the date of entry of 7 Judgment herein.” Id. ¶ 2. In general, the statute of limitations for most of Plaintiffs’ claims was 8 four years. However, the FAC sought tolling based on Ramirez I, which was filed on February 13, 9 2013. 10 On August 11, 2015, the parties filed a stipulation of dismissal as to ManpowerGroup United States District Court Northern District of California 11 Public Sector Inc., as the parties acknowledged that ManpowerGroup Public Sector Inc. did not 12 employ temporary non-exempt workers in California during the Class Period. ECF No. 42. 13 On August 13, 2015, Plaintiffs moved for leave to file a Second Amended Complaint. 14 Plaintiffs’ proposed Second Amended Complaint sought to: “(1) name ManpowerGroup [] as a 15 Defendant, taking into account an alleged name change from Manpower Inc. . . . to 16 ManpowerGroup []; (2) revise the FAC’s proposed class definitions; and (3) allege an earlier date 17 of March 17, 2007 for the beginning of the Class Period based on the argument that putative class 18 action complaints filed in Willner [I] tolled the applicable statutes of limitations.” ECF No. 78 19 (“SAC Order”) at 5. 20 On October 29, 2015, the Court granted in part and denied in part Plaintiffs’ motion. The 21 Court granted Plaintiffs’ proposal to name ManpowerGroup as a Defendant, as “Defendants [had] 22 concede[d] that the corporate entity changed its name as Plaintiffs allege.” Id. at 6. The Court 23 also granted Plaintiffs’ proposal to revise Plaintiffs’ class definitions. Id. at 9. The Court denied 24 Plaintiffs’ request to allege an earlier date for the Class Period based on Willner I. As the Court 25 explained, “the present case involves issues that were not present in Willner [I].” Id. at 12. Thus, 26 “Plaintiffs cannot rely on Willner [I] to toll the statute of limitations.” Id. Additionally, the Court 27 observed that “the Mata Plaintiffs are not on the Willner [I] class list.” Id. 28 10 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 On November 2, 2015, Plaintiffs filed the Second Amended Complaint. ECF No. 81 2 (“SAC”). Although the Court had denied Plaintiffs’ attempt to allege an earlier Class Period 3 based on Willner I, the SAC nonetheless referred to Willner I. Specifically, the SAC defined the 4 Class Period as follows: 5 9 [T]he period of time beginning February 13, 2009, through the date of entry of Judgment herein, based upon the fact that putative class action complaints were filed in Willner v. Manpower, Inc. [Willner I], U.S.D.C., Northern District of California Case No. 3:11-cv-02846-JST, filed on March 17, 2011, and Ramirez v. Manpower, Inc./California Peninsula [Ramirez II], U.S.D.C. Northern District of California Case No. 5:13-cv-02880-EJD, filed on April 12, 2013, and these actions define proposed classes and alleged claims that overlap with the proposed classes and claims alleged herein. 10 SAC ¶ 2. On August 27, 2015, while Plaintiffs’ motion for leave to file the SAC was still 11 pending, Defendants moved for partial summary judgment. ECF No. 48. “Defendants move[d] 12 for summary judgment on two grounds.” ECF No. 144 at 10. “First, Manpower Inc. (now known 13 as ManpowerGroup []) contend[ed] that the settlement and release in Willner prohibits the putative 14 class members from pursuing [certain claims] in the instant case.” Id. at 11. “Second, Manpower 15 US contend[ed] that the named Plaintiffs were employed only by Manpower CP and not 16 Manpower US, and thus Plaintiffs lack[ed] standing to sue Manpower US.” Id. 6 7 United States District Court Northern District of California 8 17 On January 31, 2016, the Court granted in part and denied in part Defendants’ partial 18 summary judgment motion. The Court found in Defendants’ favor as to Plaintiffs’ standing to 19 bring suit against Manpower US, and Manpower US was dismissed with prejudice. ECF No. 146. 20 However, the Court denied summary judgment as to Defendants’ contention that the “release in 21 Willner prohibits the putative class members [in Mata] from pursuing [various claims].” ECF No. 22 144 at 11. This Court noted that, “[b]ased on Manpower Inc.’s representations regarding the scope 23 of the Willner [I] settlement,” the “release [in Willner I] was only intended to encompass claims 24 based on untimely receipt of paychecks, not claims such as those here,” which are “based on a 25 complete failure to pay.” Id. at 13.1 26 27 28 1 On March 14, 2016, the Court issued an amended Summary Judgment Order. ECF No. 154. This amended Order corrects an error in the Court’s January 31, 2016 Summary Judgment Order, 11 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 2 3 4 5 6 7 On December 8, 2015, Defendants filed a motion to strike, which sought to strike the following Class Period allegations from paragraph 2 of the SAC: [T]he period of time beginning February 13, 2009, through the date of entry of Judgment herein, based upon the fact that putative class action complaints were filed in Willner v. Manpower, Inc., U.S.D.C., Northern District of California Case No. 3:11-cv-02846-JST, filed on March 17, 2011, and Ramirez v. Manpower, Inc./California Peninsula, U.S.D.C. Northern District of California Case No. 5:13-cv-02880-EJD, filed on April 12, 2013, and these actions define proposed classes and alleged claims that overlap with the proposed classes and claims alleged herein. 8 ECF No. 134 at 1. The Court granted in part and denied in part Defendants’ motion. First, the 9 Court agreed with Defendants that Plaintiffs’ attempt to use Willner I to set the Class Period was “improper.” Id. at 17. The Court emphasized “that this is the seventh time that Plaintiffs have 11 United States District Court Northern District of California 10 been instructed that the claims in the instant case are different from the claims in Willner I [or 12 Willner II]. The Court will not accept any further attempts by Plaintiffs to relate or entangle the 13 proceedings of the instant case with those in Willner I or Willner II.” Id. 14 The Court went on to conclude that the Class Period would begin on February 13, 2009 for 15 Manpower Inc. and ManpowerGroup US Inc., which is four years before Ramirez I was filed, and 16 would begin on April 12, 2009 for Manpower CP, which is four years before Ramirez II was filed. 17 On March 4, 2016, Plaintiffs moved for class certification. ECF No. 152. The motion was 18 set for hearing on May 19, 2016, at 1:30 p.m. On May 16, 2016, the parties filed a stipulation 19 which stated that they had “reached a settlement in principle that would resolve the case.” ECF 20 No. 171 at 2. Plaintiffs subsequently filed the instant motion for preliminary approval of class 21 action settlement on June 9, 2016. This motion included copies of the proposed Notice and 22 Settlement Agreement. The motion for class certification was denied as moot, and the class 23 certification hearing was vacated. ECF Nos. 173, 177. 24 25 The Court held a hearing on the motion for preliminary approval on September 8, 2016. ECF No. 183. After the hearing, the Court denied the motion for preliminary approval. ECF No. 26 27 28 which has “no impact on the outcome of the Court’s [January 31, 2016] Summary Judgment Order.” ECF No. 153. 12 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 182. The Court held that the proposed settlement contained “obvious deficiencies” such as “(a) the 2 failure of the Settlement Agreement and proposed Notice to notify Class Members about related 3 cases and released claims, (b) tension over the Class definition and released claims, (c) issues 4 regarding the objection procedure, and (d) other issues.” Id. at 13. The Court ordered that the 5 parties file a renewed motion for settlement addressing these deficiencies by October 6, 2016. Id. 6 at 20. In response, the parties filed the instant renewed motion for preliminary approval on 7 October 6, 2016. ECF No. 184. 8 II. LEGAL STANDARD Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a 9 certified class may be settled . . . only with the court’s approval.” Fed. R. Civ. P. 23(e). “The 11 United States District Court Northern District of California 10 purpose of Rule 23(e) is to protect the unnamed members of the class from unjust or unfair 12 settlements affecting their rights.” In re Syncor ERISA Litig., 516 F.3d 1095, 1100 (9th Cir. 13 2008). Accordingly, in order to approve a class action settlement under Rule 23, a district court 14 must conclude that the settlement is “fundamentally fair, adequate, and reasonable.” Hanlon v. 15 Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). 16 Preliminary approval of a settlement and notice to the class is appropriate if “[1] the 17 proposed settlement appears to be the product of serious, informed, non-collusive negotiations, [2] 18 has no obvious deficiencies, [3] does not improperly grant preferential treatment to class 19 representatives or segments of the class, and [4] falls within the range of possible approval.” In re 20 Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) (citing Manual for 21 Complex Litigation (Second) § 30.44); see also In re High-Tech Emp. Antitrust Litig., 2014 WL 22 3917126, *3 (N.D. Cal. Aug. 8, 2014). 23 III. 24 DISCUSSION Plaintiffs’ October 6, 2016 renewed motion for preliminary approval addresses many of 25 the deficiencies that the Court identified in its September 8, 2016 order denying preliminary 26 approval, and the Court appreciates the parties’ efforts. However, Plaintiffs’ renewed motion for 27 preliminary approval is still deficient and therefore denial of preliminary approval is warranted. 28 13 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Despite the Court’s earlier finding that the language of the Release was too broad and inconsistent 2 with Ninth Circuit law, the parties have failed to narrow the language of the Release. This 3 deficiency alone justifies denying the renewed motion. 4 A. Scope of the Release 5 In the Court’s September 8, 2016 order denying preliminary approval, the Court noted 6 that “the Release applies to ‘any and all related claims,’ which includes violations of numerous 7 sections of the California Labor Code, all Industrial Welfare Commission Wage Orders, 8 California Business and Professions Code § 17200, and any other related claim that is ‘known or 9 unknown, contingent or accrued, statutory or common law.’” ECF No. 182 at 17. The Court reiterated its past holding that where “the release in a settlement agreement does not limit released 11 United States District Court Northern District of California 10 claims to those arising out of the facts alleged in the complaint, denial of . . . approval [to] the 12 settlement is appropriate.” Id. (quoting Chavez v. PVH Corp., 2015 WL 581382, *6 (N.D. Cal. 13 Feb. 11, 2015)). In light of this holding, the Court held that “the breadth of the Release, in 14 conjunction with the numerous possible related state and federal cases, is an obvious deficiency 15 that precludes preliminary approval.” Id. 16 Despite the Court’s holding that the Release, and particularly the section applying to “any 17 and all related claims,” was deficient because it was overbroad, the parties did not change this 18 portion of the Release in their renewed motion for preliminary approval. The relevant language of 19 the Release, which is identical to the language of the Release in the last proposed settlement, 20 releases the following: 21 [A]ny and all claims . . . which relate to or arise out of the allegations and claims 22 asserted in the operative complaint in the action and any and all related claims, 23 including claims for unpaid wages, minimum wage, overtime, final wages, 24 itemized wage statements or violations of California Labor Code sections 201, 25 202, 203, 218.5, 226, 226.7, 510, 512, 558, 1194, 1198, 2698 to 2699.5, the 26 Industrial Welfare Commission Wage Orders, and Business and Professions Code 27 § 17200 et seq., California Code of Civil Procedure 1021.5, damages and/or 28 14 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 penalties whether any such related claim is known or unknown, contingent or 2 accrued, statutory or common law. 3 As in the last proposed settlement, this Release is overbroad. A plain reading of the language of 4 the Release suggests that class members are giving up not only claims “which relate to or arise out 5 of” the facts of the case, but are also giving up “any and all related claims.” For example, the 6 Release suggests that any claim for unpaid wages against a Defendant would be a related claim, 7 even if the facts of that unpaid wages claim were entirely different from the facts in the instant 8 case. 9 The scope of the Release in the proposed settlement is not consistent with Ninth Circuit case law. The Ninth Circuit has held that “[a] settlement agreement may preclude a party from 11 United States District Court Northern District of California 10 bringing a related claim in the future even though the claim was not presented and might not have 12 been presentable in the class action, but only where the released claim is based on the identical 13 factual predicate as that underlying the claims in the settled class action.” Hesse v. Sprint Corp., 14 598 F.3d 581, 590 (9th Cir. 2010) (internal quotation marks omitted). 15 Here, the Release in the proposed settlement is not so limited. Whatever the precise 16 meaning of the phrase “any and all related claims,” it is clear that the phrase is meant to sweep 17 more broadly than claims that are “based on the identical factual predicate as that underlying the 18 claims in the settled class action.” Hesse, 598 F.3d at 590. This Court has repeatedly held that such 19 overbreadth in a proposed release is an obvious deficiency that warrants denying preliminary 20 approval. See Chavez v. PVH Corp., 2015 WL 581382, *6 (N.D. Cal. Feb. 11, 2015); Johnson v. 21 Quantum Learning Network, Inc., Case No. 15-CV-05013-LHK, ECF No. 43, at 4–5 (August 12, 22 2016); McKeen-Chaplin v. Franklin Am. Mortg. Co., 2012 WL 6629608, at *5 (N.D. Cal. Dec. 19, 23 2012). 24 Thus, the Court reiterates its previous holding that the breadth of the proposed Release is a 25 deficiency that precludes preliminary approval. ECF No. 182, at 17. In order to remedy this 26 deficiency, Plaintiffs are ORDERED to file an amended motion for preliminary approval, with an 27 amended Settlement Agreement and proposed Notice. Both the amended Settlement Agreement 28 15 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 and proposed Notice must contain a revised Release that conforms to the requirements of Ninth 2 Circuit case law. 3 B. Other Issues 4 The parties shall make the following changes to the Notice: 5 Next to the box labeled “Object” under the table entitled “Your Legal Rights and Options 6 in this Settlement,” the parties shall revise the language to read as follows: “If you do not opt out, 7 you may object to the settlement by filling out the objection form and mailing the form to the 8 Settlement Administrator, CPT Group, as described under Question 13. The Court will consider 9 timely objections.” 10 Next to the box labeled “Attend a Hearing” under the table entitled “Your Legal Rights United States District Court Northern District of California 11 and Options in this Settlement,” the parties state that objections must be filed and served even 12 though the parties have stipulated that objections shall be mailed to the Administrator. 13 Accordingly, the parties shall revise the language to read as follows: “The Court will hold a 14 hearing on [ENTER DATE AND TIME] to determine whether the settlement is fair, as discussed 15 in Question 14 below. You may attend the hearing, but you are not required to attend. If you 16 timely fill out and mail the objection form, and if you also want to speak about your objection, you 17 should send a letter to the Settlement Administrator, CPT Group, giving notice of your intention to 18 appear and speak at the hearing.” 19 20 21 22 23 24 25 Under Question 2, on the first line of the text the word “their” shall be replaced with the word “the.” Under Question 3, in the first full sentence on page 3, the parties shall delete the phrase “if they comply with the instructions in this Class Notice.” Under Question 5, the parties shall add a comma after the phrase “You can do nothing” and a comma after the phrase “and if you are entitled to a payment.” Under Question 6, the parties shall specify where the Joint Stipulation of Class Settlement 26 is available for review. The parties shall also update the amount of the base payment because, as 27 the parties stated at the December 22, 2016 hearing, the increase in the class size reduces the base 28 16 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 payment. 2 Under Question 9, the parties shall include a definition of “Manpower franchise.” The 3 parties shall make the same change to the Release in the Joint Stipulation of Class Settlement. 4 Under Question 9, the Notice contains the following sentence before discussing the 5 proposed settlement’s effect on possibly related cases: PLAINTIFF’S COUNSEL IS SOLELY 6 RESPONSIBLE FOR THIS ANALYSIS, AND DEFENDANT’S COUNSEL NEITHER 7 ENDORSES NOR APPROVES OF THE EXPLANATIONS. Per the parties’ statements at the 8 December 22, 2016 hearing, the parties shall revise this sentence to clarify that Defendants express 9 no opinion on the Sanchez and Zemudio cases because Defendants are not parties in those cases, but Defendants agree with the discussions of the remaining cases. The parties shall make the same 11 United States District Court Northern District of California 10 change to the Joint Stipulation of Class Settlement. 12 13 14 Under Question 9, the parties shall clarify that the proposed agreement, by dismissing Willner II, eliminates any possibility of the settlement in Willner I being reopened. Under Question 9, at the end of the discussion of each case, the parties shall provide in 15 bold type a simple explanation of the effect that the proposed settlement would have on class 16 members’ claims in each case. A clear conclusion in bold at the end of each case eliminates the 17 need for an overall summary paragraph. For example, the parties shall clarify that every member 18 of the class in Rico is a member of the class in the instant case and that the settlement in the instant 19 case would prevent the Rico class from pursuing waiting time, wage statement, and PAGA penalty 20 claims in the Rico case, but that the settlement in the instant case would not affect the Rico wage 21 claim requesting compensation for the time spent putting on and taking off required clothing and 22 personal protective equipment. Similarly, the parties shall clarify that that every member of the 23 class in Martinez is a member of the class in the instant case and that the settlement in the instant 24 case would prevent the Martinez class from pursuing waiting time, wage statement, and PAGA 25 penalty claims in the Martinez case, but that the settlement in the instant case would not affect the 26 meal and rest period claims in Martinez. 27 28 Under Question 9, the parties shall revise the discussion of the Sanchez case to state that 17 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 there is a motion pending that would eliminate Manpower CP employees from the class in the 2 Sanchez case. 3 4 Under Question 13, the parties shall revise the language to read as follows: You can ask the Court to deny approval of the proposed settlement 5 by mailing an objection to the Claims Administrator. If the Court denies 6 approval of the proposed settlement, no settlement payments will be sent 7 out pursuant to this Settlement Agreement, and the lawsuit will continue 8 until it is resolved either through settlement, trial, or a judgment issued by 9 the Court. If that is what you want to happen, you must object. Any objection must (a) clearly identify the case name and number (Mata et al. 11 United States District Court Northern District of California 10 v. Manpower, Inc./California Peninsula, Case No. 5:14-cv-03787), (b) be 12 submitted to the Court by mailing them to the CPT Group Inc., located at 13 16630 Aston Street, Irvine, CA 92606, and (c) must be postmarked on or 14 before [ENTER DATE]. Please use the Objection Form attached to this 15 Proposed Notice if you wish to file an objection. 16 To exclude yourself from the settlement, you must opt out of the 17 settlement and follow the directions described above in Question 10. 18 Please note that you cannot both object to the settlement and exclude 19 yourself. 20 You may also appear at the Final Approval Hearing, either in 21 person or through your own attorney. If you appear through your own 22 attorney, you are responsible for paying that attorney. You are not 23 required to appear at the Final Approval Hearing. 24 25 26 27 28 Under Question 16, the parties shall include the full address of the Settlement Administrator, CPT Group. Under Question 17, the parties shall include the name and contact information for Class Counsel. Additionally, the parties shall clarify that questions and comments should be directed to 18 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Class Counsel and the Settlement Administrator, that class members should first seek case 2 documents on the Settlement Administrator’s website, and finally, that class members should only 3 access PACER or visit the Clerk’s Office to review any additional case documents. Finally, the parties shall agree on a cut-off date for the class period and provide an updated 4 5 number of class members in its revised motion for preliminary approval. 6 IV. 7 CONCLUSION For the foregoing reasons, Plaintiffs’ renewed motion for preliminary approval of class action settlement is DENIED. Plaintiffs are instructed to file an amended motion for preliminary 9 approval, with an amended Settlement Agreement and proposed Notice, by January 17, 2017. 10 January 26, 2017 at 1:30 p.m. shall be reserved as a hearing date for the amended motion. The 11 United States District Court Northern District of California 8 amended motion, amended Settlement Agreement, and proposed Notice must cure the deficiencies 12 outlined in this Order. 13 IT IS SO ORDERED. 14 Dated: December 22, 2016 15 16 ______________________________________ LUCY H. KOH United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 19 Case No. 14-CV-03787-LHK ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT